The Cost of Divorce: Fixed Fee or Hourly Billing?

Most divorce lawyers bill by the hour, and hourly rates can vary greatly from lawyer to lawyer. Around here, the rate can be anywhere from $175 to $350+ per hour. Very few divorce attorneys will set a fixed fee. They’ll tell you that so many factors are unpredictable that it’s impossible to set a fixed fee, and there’s some truth to that.

But I take a different approach. If you and I agree that a fixed fee works best for you, I’ll quote you the fee after we first meet. If you prefer to pay by the hour, that’s your call. It’s a difficult decision, so let’s take a look at the pros and the cons of each, then I’ll tell you what side I fall on. 

Hourly billing

When a lawyer bills by the hour, you make an initial payment, which is deposited into the lawyer’s trust account. The lawyer bills an hourly rate and sends you a statement, usually monthly, of all time spent and any expenses. Fees and expenses are taken from the funds that are held on account. When those funds are reduced to a certain level, you’ll receive an invoice requesting that the initial payment be replenished.

Pros

  • You pay only for the time spent on your case
  • If your case settles quickly, you may pay less than you would have with a fixed fee.

Cons

  • Uncertainty. With hourly billing, you won’t know what your final cost  will be. It’s often much more than the initial payment, because you pay for every phone call, every e-mail, every letter, everything.
  • Hourly billing emphasizes time and effort, not efficiency and experience. The more time the lawyer spends, the higher the fee will be. The lawyer becomes “time oriented,” not “mission oriented.” The interests of the lawyer and client are not aligned.
  • Less happy lawyer. This may not seem like a concern of yours, and my guess is that you’ll have little sympathy, but I have never met a lawyer who enjoys keeping track of time. It’s an administrative and accounting pain in the neck.
  • Hourly billing may damage communication between you and the lawyer. In hourly billing, all phone calls, e-mails, faxes, and letters are billed. You may become reluctant to communicate with your lawyer, and that can’t help.
  • Fixed-fee. With a fixed fee, you pay a set fee for everything that’s included in the attorney-client contract.

Pros

  • You know exactly what your legal fee will be, so your anxiety will be reduced. If you’re getting divorced, this can only help.
  • Your lawyer has an incentive to conclude your case efficiently.
  • The interests of you and your lawyer are aligned.
  • You don’t pay extra for calls, e-mails, meetings, etc.

Cons

  • Your case may settle much more quickly than you thought possible.  You could possibly pay more than you would have with hourly billing.
  • In theory, your spouse’s divorce lawyer could use the fact of a fixed fee and try to drag things out, although I truly don’t believe I’ve ever seen this happen.

My opinion: fixed vs. hourly?

If you’ve concluded that I prefer the fixed fee, you’re right. I truly believe it makes for a better arrangement between the client and the lawyer.

I have no idea what an appendectomy costs, and I don’t want to know. But if two doctors charge the same—let’s say $4,000—but one takes 4 hours, and the other takes 45 minutes, I wouldn’t consider the 45-minute doctor overpaid.

Thanks for reading. Please call me at 978-851-244 or e-mail me at dalton@usa.net if you’d like to discuss anything.

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